As demonstrated in our principal brief, the Commission acted within its
statutory authority – and consistently with the APA and the Constitution – in
adopting the Open Internet Order. In this surreply, we focus on this Court’s
recent decision in Cellco Partnership v. FCC, No. 11-1135 (December 4,
2012), which reaffirms the Commission’s conclusions concerning: (1) its
authority under Title III of the Communications Act; (2) the absence of any
common carriage mandate under the Order; and (3) the Order’s compliance
with the Fifth Amendment. 1. Title III Cellco confirms that the FCC has authority under Title III of the
Communications Act to establish Open Internet rules applicable to wireless
mobile broadband providers. Cellco upheld an FCC rule requiring cellular telephone companies to
enter into agreements for “data roaming” – arrangements that allow a
customer outside the range of his own wireless provider’s network to access
mobile data services using another provider’s network. This Court held that
the rule was within the Commission’s authority under Section 303(b) of the
Act to “[p]rescribe the nature of the service to be rendered” by the holders of
FCC-issued spectrum licenses. Slip op.13 (“[T]he data roaming rule merely

defines the form mobile-internet service must take for those who seek a
license to offer it.”). The Court found it “clear” that the data roaming rule fell
“well within the Commission’s Title III authority,” particularly when
considered together with the Commission’s authority both under Section
303(r) to promulgate implementing rules and under Section 316 to modify
radio licenses. Id.
So too here. By setting basic “rules of the road” establishing that
wireless broadband Internet access providers may not block lawful data
traffic in using their FCC-licensed spectrum, Order ¶¶42, 99 (JA___), the
Commission’s Open Internet Rules likewise “prescribe the nature of the
1
service to be rendered” by the holders of those licenses. See FCC Br. 43-46.
Petitioners err in their contention that the Commission did not rely on
Section 303(b) in the Order and therefore may not do so here. Verizon Reply
17; MetroPCS Reply 5. The Commission expressly grounded its Open
Internet Rules on its authority under “Title III of the Communications Act,” Order ¶133 (JA___); see id. at ¶¶127, 128 (JA___), and the “Ordering

1 Nothing in Section 303(b) as construed in Cellco limits that provision to
regulations concerning “spectrum management.” Verizon Reply 18. Regardless, by ensuring that spectrum is used in a manner that will spur demand, innovation, and investment, seeOrder ¶134 (JA___), the Orderensures spectrum will be “manage[d]…in the public interest.” Cellco, slip op. 11; see Br. 37-39.

2Clauses” make clear that the Order was adopted “pursuant to,” inter alia,
“section[] 303…of the Communications Act,” Order ¶170 (JA___).
Moreover, the Commission relied on precedent adopting similar rules for
wireless providers pursuant to, inter alia, Section 303(b). See id. ¶134 &
nn.433, 434 (JA___); 700 MHz Order, 22 FCC Rcd 15365 ¶207 n.471
(2007). Accordingly, this is not a case in which the Court must “guess at the
theory underlying the agency’s action.” SEC v. Chenery Corp., 332 U.S.
194, 197 (1947); see Motor Vehicle Mfrs. Ass’n v. State Farm, 463 U.S. 29,
43 (1983) (Chenery satisfied where “agency’s path may reasonably be
discerned”). Cellco likewise confirms that the Order is within the Commission’s
independent power to modify licenses (including by rulemaking) under
Section 316 of the Act. The Cellco Court rejected Verizon’s claim that a data
roaming obligation was a “fundamental” change to radio license terms that
exceeded the Commission’s license-modification authority. Slip op. 15.
Petitioners now argue that the rule in Cellco imposed only a “limited
obligation,” while this Order works a “fundamental change,” Verizon Reply
20-21; MetroPCS Reply 10. But the Order, “grounded in broadly accepted
Internet norms,” Order ¶1 (JA___), simply preservesthe status quo. By
contrast, the rule in Cellco imposed a new duty to negotiate roaming

3agreements with competing providers on “commercially reasonable terms.” SeeCellco, slip op. 3. Under Cellco, the Open InternetOrder – which does
not prevent Verizon from engaging in any anticipated business practices, see,
2e.g.,Verizon Br. 51 – is not a fundamental change. 2. Common Carriage
Consistent with our arguments (Br. 61 & n.12), Cellco holds that “the
Commission’s interpretation and application of the term ‘common carrier’
warrants Chevron deference.” Slip op. 17.
As Cellco made clear, “there is room for permissible regulation of
private carriers that shares some aspects of traditional common carrier
obligations.” Slip op. 23. Thus, a rule does not impose common carriage
obligations simply because, as here, it limits providers’ discretion in some
manner. Id. 22-23. As the Court explained, “common carriage is not all or
nothing – there is a gray area in which although a given regulation might be
applied to common carriers, the obligations imposed are not common carriage per se.” Id. 21-22. And within that “gray area,” “the Commission’s

2 Because the rules for wireless and fixed providers operate independently,
differ in scope, and rely in part on distinct authority, the rules for wireless service would be lawful regardless of the Court’s determination regarding the fixed rules (which are also lawful). Contra Verizon Reply 21-22.

4determination that a regulation does or does not confer common carrier status
warrants deference.” Id. 22. Cellco further held that core common carriage exists when a carrier “is
forced to offer service indiscriminately and on general terms.” Slip op. 21.
Here, the Order leaves a broadband provider free to offer (or decline) to serve any end user – the only “customer” here – on any price and terms it chooses.
Br. 66. Because there is no obligation to “offer service indiscriminately and
on general terms,” there is no common carriage.
Verizon nevertheless argues (Reply 5-7) that the Order creates “per se”
common carriage because an access provider “provi[des]… service” to edge
providers. But under the Communications Act (and consistent with Cellco), a
common carriage relationship is defined in relation to an entity that
“request[s]” “service.” 47 U.S.C. § 201(a); see Br. 61-62. Edge providers do
not request service from an end user’s Internet access provider. Indeed, they
generally have no technological or commercial relationship with that access
provider. Br. 62. Instead, edge providers typically pay their own access
providers to connect to the Internet. See Internet Eng’rs Amicus Br. 11.
Thus, as in Cellco, the FCC acted within its discretion in determining that
there is no common carriage where a rule preserves a provider’s right to serve
(or not serve) the person requesting service – i.e., any end user. Once a

5service provider has opted to serve a customer, service is not turned into
common carriage by a rule that protects the customer’s ability to receive
Internet content of his choice.
To be sure, common carriage may be provided on a wholesale basis,
Verizon Reply 6-7, but still the relevant entity is the customer who
“request[s]” service. Thus, Verizon’s analogy to access charges (Reply 7) is
inapt. In the telephone context, the long-distance carrier requests service
(usually defined by tariff) from the local carrier. SeeAccess Charge Reform,
14 FCC Rcd 14221, 14318 ¶188 (1999). The long-distance carrier and the
local provider also have a direct technical relationship, as the long-distance
provider delivers traffic to (or accepts traffic from) the local provider. In the
case of the Internet, by contrast, edge providers do not request service from
the end user’s access provider, and that access provider is not required to
deliver content based on the demand of edge providers. Instead, it is only the
request of an end user – the access provider’s customer – that triggers service.
In this context, the FCC had discretion to conclude that a no-blocking rule
does not create a common carriage relationship between edge providers and
an end user’s access provider. Indeed, any other result would have sharply
expanded traditional notions of common carriage.

63. Fifth Amendment
As the Cellco Court held, “a justly compensated taking is not
unconstitutional.” Slip op. 26. Because broadband providers are
compensated by their customers, there is no colorable takings claim here. Br.
76-77.

I, Joel Marcus hereby certify that on January 4, 2013, I electronically filed the foregoing Surreply Brief for Respondents with the Clerk of the Court for the United States Court of Appeals for the D.C. Circuit by using the CM/ECF system. Participants in the case who are registered CM/ECF users will be served by the CM/ECF system. Others, marked with an asterisk, will receive service by mail unless another attorney for the same party is receiving service through CM/ECF.

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